Buy to let landlords split over futures

Buy to let landlords split over futures

Buy to let landlords in the UK are split over the future of the sector with 44% looking to sell up, a report reveals.

However, according to Octopus Choice they say that 56% of buy to let investors are looking to keep and even buy more rental homes for their portfolio.

The survey reveals that most landlords see property as a moneymaking asset but their opportunities will decline in future.

Also, as the buy to let sector consolidates, owners are struggling to decide whether they should leave or remain in the sector.

Landlords looking to leave

Of those landlords looking to leave, 24% point to falling yields and 23% to increasing taxes.

Also, 19% say cooling house prices will force them to leave and 6% say that managing a rental property has become a burden.

In addition, 61% of landlords say they have undervalued the costs of renting.

The head of Octopus Choice, Sam Handfield-Jones, said: “Landlords have a love affair with bricks and mortar, but the cost and hassle of buy to let is a growing source of frustration. Some landlords are finding that their reliable day-to-day income is becoming hard to come by.

“That's not the case across all parts of the sector and there’s still money to be made in the right region with the right property.”

Their report says there is a big regional divide for the best performing BTL areas with landlords in London facing slowing house price growth and falling yields which are affecting profits.

From their figures, a landlord in London who buys a rental property at £475,000 would need to sell the property eight years later at £590,000 just to break even.

That figure includes a landlord’s income over that period with costs of more than £1,250 every year for the first five years.

Warning to landlords of student property

Meanwhile, the Master Locksmiths’ Association has issued a warning to landlords with student property as the new intake of students looks forward to beginning university.

They say that would-be thieves are being offered rich pickings because student accommodation tends to be the most targeted property through lax security measures.

One study has found that 25% of students will be burgled while at university, costing £25 million since 2014.

The association's managing director, Steffan George, said: “Student properties have been prone to breaking-in and now with students looking for accommodation with more facilities and a better finish, the cost for potential repairs and damage could be higher for landlords than ever before.”

The association says landlord should think ‘like a potential thief’ and consider security and safety implications, including improving and investing in quality security fixtures.